Also ultimate compromise, South Korean and US negotiators are finally managed to sign, yesterday, in Seoul, a large free trade agreement. The most important, according to experts, since the signing, in 1994, the North American free trade agreement (NAFTA), between the United States, the Mexico and the Canada. This agreement between the first and the eleventh world economy is also the first of its kind between the United States and a major Asian power.
The proponents of the Treaty expect an increase of about 20 of trade between the United States and the Korea of the South, reaching $ 78 billion last year. The agreement provides for the immediate elimination almost 90 of the customs duties on industrial products, the rest to be deleted from here in 15 years, said the Korean negotiator, Kim Jong-hoon.
US President, George w. Bush, welcomed this Treaty which "will generate opportunities for farmers, industrialists and American service providers export." In a letter to the Senate and the House of representatives, he explained that the opening of borders will "promote the growth and the creation of jobs paying in the United States and allow consumers to save money while having a more choice".
It must be said that this agreement was reached in extremis to be put to the vote of the Congress in the Statute of the Trade Promotion Authority (TPA), which allows the Government to propose trade agreements without that parliamentarians can amend it. TPA coming due on 30 June, agreement was reached just in time to satisfy the ninety days assessment period left to the parliamentarians. But the green light from Congress to democratic majority is not yet acquired. And the agreement must also be ratified by the Korean Parliament in September.
Eighteen months of negotiations
The negotiations have lasted ten months and stumbled again these days on several issues, such as the automobile and agriculture (rice and beef). The opening of borders, cheap us products concerned much of the population of South Korea, starting with the peasants. The protests were in Korea in recent months. Sunday, a protester is even immolated by fire before the Seoul hotel where the discussions took place. The Korea of the South was finally able to exclude the Treaty the opening of its borders much more competitive, American rice. She will not to sacrifice this traditional culture, while the Mexico had, him, sacrificed his corn on the altar of the NAFTA. In return, Washington has succeeded on the record of beef: Seoul has promised to eliminate its 40 customs duties in the next 10 years. On the other hand, the lifting of the ban on us beef (introduced in 2003 because of mad cow disease) is not officially part of the agreement even if Korean officials stated orally promised to "reconsider positively" folder. Promises that Democratic Senator Max Baucus has already held "waves", stating that he would block the agreement until the issue is not settled. This is therefore a real doubt on its ratification.
The United States hope to quickly reduce the trade deficit with Seoul (16 billion dollars in 2005), linked to more than 80 in the automotive sector. South Korea sells them nearly 800,000 vehicles per year, while it does them in purchases of 4,000 to 5,000. It will therefore change its customs barriers based on the power of the engines. Nevertheless, analysts Koreans felt yesterday that the national automotive industry could benefit from the agreement and significantly increase its exports to the United States through the removal of past taxes for which it was submitted.